Today, we continue our series that highlights procurement’s (and the chief procurement officer’s) evolving influence within the greater enterprise. Each of these articles will tackle a business function or enterprise category that is actively progressing their strategies and general corporate outlook as a direct result of the procurement unit’s influence, processes and recommendations. In our first article, we looked at procurement’s convergence with finance while the second focused on procurement’s convergence with business travel. Today’s article will discuss procurement’s evolving influence on the marketing function.

The previous articles in our “Procurement’s Evolution” series detailed how the procurement unit’s expertise is actively leveraged in other departments across the average enterprise. The focus of today’s article shines a light on the convergence of procurement principles with a department that isn’t ordinarily considered a top candidate for procurement’s evolving influence: marketing.

In the past, the marketing division often (and still does, in most cases) operated outside of the realm of spend management; that is, they typically have a budget, execute upon that budget and stick to it to the best of their collective ability. In the larger world of complex spend management (including contingent labor, business travel, real estate, facilities and meetings / events), marketing materials and services has often been pegged as spend category that is rife for cost savings through superior negotiation and vendor management (i.e. some of procurement’s “touch”).

However, by taking a deeper look at how marketing operates in 2014, it’s quite clear that procurement’s influence can be a critical part of their overall execution across several major avenues:

• Driving marketing programs and branding within a defined budget. A company’s brand is perhaps the greatest representation of its values and standing in the marketplace. Its brand and its marketing are often the most visible aspects of the entire enterprise and it is most clearly the work that executives see and clearly link to the marketing department. Stating the obvious perhaps but the point is that the success of a company’s marketing programs is linked directly to the jobs, compensation, and career paths of the marketing leaders. With that in mind, it’s not at all shocking when cost savings, contract negotiation, and strategic sourcing are thrown by the wayside in lieu of what are viewed as simply selecting the highest-quality materials or services.
• Spend management principles discussed during the project development phase. Even the best marketing departments will sometimes put project needs ahead of costs. By bringing in a discussion of ideal suppliers during the project development phase, the marketing team will ensure that, later down the line, there is no uncomfortable discussion with either the CPO or CFO. Also, in this regard, by introducing these procurement efficiencies in the developmental phases of critical projects, marketing team members will avoid the discussion of procurement hindering creativity.

The issue ultimately is not that marketing wants to spend its budget unwisely or that procurement can identify huge savings in marketing. The issue is that most marketing professionals are not trained to manage a process that clearly defines requirements or properly engages and evaluates bidders. Marketing professionals are not typically equipped to research and benchmark the market to understand market rates or negotiate contracts and service levels.

Procurement’s convergence with marketing is not financially-motivated, it is process-motivated. Get the best marketing support on the budget and hold the vendors accountable to well-defined specs and SLAs. CFOs prize savings but they prize sales more and that after all is what the marketing department is trying to do.

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Tagged in: Christopher Dwyer, Collaboration, Complex Categories, Strategy